More Americans Debt-Free, but the Rest Owe More

More Americans are debt-free than in 2000, but the ones who have debt owe nearly 40 percent more, and seniors have the biggest percentage increase in debt, the Census Bureau said.

The percentage of U.S. households carrying any debt dropped to 69 percent in 2011 from 74 percent in 2000, the government reported Thursday. But the median debt load rose to $70,000, from an inflation-adjusted $50,971.

Debt owed by seniors doubled, to a median of $26,000, according to the Census. A median figure means that half of households carry more debt while half carry less.

The government's data said seniors' rising housing debt led the increase in their overall debt load. But they also are more likely than before the recession to have unsecured debt or even student loans, often incurred as they try to help their adult children cope with job loss, divorce or education costs, said Lynnette Khalfani-Cox, a personal finance expert who helps devise financial-planning programs for the AARP.

"We've known for five-plus years that seniors are falling into debt, and it's very troubling,'' Khalfani-Cox said. "Most of us have this idealized concept of riding into the sunset with a paid-off house. Unfortunately, that isn't the case.''

The Census Bureau also said that, through 2011, the median household had a 16 percent lower net worth than in 2000. The big swings during the decade—moving higher between 2000 and 2006 before big declines—reflected the swings in housing prices, the bureau said.

The Census data are consistent with figures from the Federal Reserve that show households' net worth rebounding from the financial crisis, said Alfred Gottschalck, chief of the labor force statistics branch at the Census Bureau. But differences in how the two studies are done lead to differences over the magnitude of the changes, he said.

The Fed said that households had made up all but $1.3 trillion of the $16 trillion of net worth lost during the financial crisis and housing bust by Dec. 31. Many economists believe the rest of the gap has closed due to rising house and stock prices this year.

The Census said the share of people with debt fell for all age groups 65 and younger. The biggest increase in debt, measured in dollars, was for households led by people 35 to 44 years old, who owed a median of $108,000. About 44 percent of seniors owed money in 2011, compared with 41 percent in 2000.

Significantly fewer Americans hold credit card debt than early last decade—38 percent compared with 51 percent, the government said. But the percentage holding other unsecured debt, including student loans and medical costs not covered by insurance, rose to 19 percent of households from 11 percent.

Unsecured debt other than credit cards is especially common in households led by people younger than 45, said Census Bureau economist Marina Vornovytskyy.